The reports are not good for employment or the unemployed who've been receiving benefits. If congress stalemates on extended benefits, there could be an increase in American citizens accepting lower pay work, but will they be able to compete with illegal immigrants? And, if they can't, is this going to cause more tension regarding the illegal immigration issue? Likely so.
If congress can find enough waste to cut, they can justify extended unemployment benefits, but is this good in the long run. The longer people can draw unemployment the less the urgency will be to find any job available and accept lower wages. Either way, the prospects don't look promising for the economy.
America is running into a wall of debt that weakens the usual government/Keynesian remedies for increased unemployment. Until we deal with the fundamental problems, nothing is likely to improve. The prospect of increased taxes, higher healthcare costs for employees and more regulation has frightened companies and caused stagnation. A full-bore campaign to implement free market principles, and a pledge from government to leave the economy alone, is vitally needed in order to turn the economy around. As I've written here many times, with the shaky global economy, if America once again became the haven for a free market, we'd attract investment from all over the world, but it will require gaurantees of a hands-off government policy and extremely low taxes. It will require a campaign promoting America as a free market haven. This is not likely to happen any time soon.